Texas sales tax revenue reached the $2 billion mark last month for the second time since November, indicating that the economy is gradually recovering and people are spending more on luxury goods.
A letter from Texas Comptroller of Public Accounts Susan Combs reiterated the fact that the economy is recovering and rebuilding after the recession. The letter said Texas has recovered 94 percent of jobs lost during the recession, while nationally the U.S. has recovered just 27 percent of jobs lost. The state will continue adding jobs in fiscal years 2012 and 2013, the letter stated, though not as rapidly as in 2011. Before November, sales tax revenue had not reached $2 billion point since before 2008’s financial collapse, according to a recent Austin American-Statesman article. Revenues continue to grow in all major economic categories and provide a significant indication of the state’s fiscal well-being, according to the article.
Comptroller spokesperson RJ DeSilva said the state has seen 22 straight months of increases in sales tax revenue, which is good news as Texas emerges from the recent recession.
“When we look at how sales tax has been forming, it’s been increasing,” he said. “A big sector is the oil and natural gas industry, but the restaurant sector has also done well, and more people go and dine out, and the retail side is also doing better.”
While DeSilva said the economic future isn’t easy to predict, higher sales tax revenue marks are encouraging and indicate positive growth.
“We’re very cautious in terms of economic outlook,” he said. “But we expect stable growth to continue in terms of what we’re seeing in the past year plus.”
Economics professor Sandra Black said she sees revenue generated from high-price purchases as a positive sign of economic improvement.
“People are buying more stuff, so that’s a good sign,” Black said. “Restaurants are luxury goods — the fact that people are spending more suggests that they’re wealthier. If your income goes down, the first thing you’re going to do is stop eating out.”
Josh Mallia, general manager of the Roaring Fork restaurant near the Stephen F. Austin Hotel on Congress Avenue, said restaurant attendance rates have increased since the end of the previous recession.
“Within this last year, we’ve definitely seen more people coming back to the restaurant,” Mallia said. “I think people realized that Austin weathered the storm really well, and since this area wasn’t hit as bad, they don’t need as much discretion with their income.”
Despite recent encouraging numbers, Combs said in the letter that it is important to remember that positive signs in sales tax revenues do not mean Texas is protected from economic downturn.
“Texas, as the recent downturn has illustrated, is not immune to events originating elsewhere in the country or the world,” she said in the letter.
Printed on Thursday, February 16, 2012 as: Sales tax boost indicates economic recovery